"By driving transaction cost down between
all parties and businesses, [blockchain is]
going to have an impact on every industry.
That means if you're a business leader
inside of an institution, you need to pay
attention to this."
-Alex Tapscott, CEO and founder of Northwest Passage Ventures
notably, data can be written,
changed and erased at any time
without record.
In contrast, a blockchain
is a decentralized construct.
It consists of a chronological
sequence (chain) of transactions
(grouped into blocks) that are
stored and updated on all of
the devices in the blockchain.
Using a cryptographic technique
known as hashing, the software
generates a unique identifier for
each block based on its contents.
This hash is then incorporated
into the code that links that block
to the next block, so that this
identifier becomes a part of the
blockchain. If the contents or
order of the blocks are altered in
any way, the hashes change.
This is important because
before a device can access or
write to the blockchain, it must
demonstrate to the other devices
on the blockchain that it has
the correct hashes. If a device is
trying to access the ledger without
authorization, or if it's trying
to make illegal modifications
to blocks in the chain, those
activities will be detected.
The technology can detect
and stop attempts at hacking
and fraudulent entries. Just
as important, it ensures that
¤
A blockchain
demonstration
reduced IBM's
average dispute
time from
40 days
to
10 days
The Hyperledger Project
Though IBM recognized the potential value of blockchain technology for
business, it found earlier versions lacking in terms of characteristics needed
to support enterprise applications. IBM built an in-house permission-based
blockchain, but then decided that the effort needed to be open standard,
open source and open governance.
In December 2015, IBM teamed with the Linux* Foundation and 17 other
like-minded corporate partners to form the Hyperledger Project (hyperledger.
org), an open-source effort targeted at developing an enterprise-grade distributed ledger framework. The distributed ledger framework itself is known as
Hyperledger Fabric. IBM initially contributed 44,000 lines of code from its
permission-based blockchain, as well as the associated patents.
Learn more about IBM Blockchain and the Hyperledger Project: ibm.com/
blockchain/hyperledger.html
-K.L.
20 // MAY/JUNE 2017 ibmsystemsmag.com
every device in the blockchain
maintains a complete record of
every transaction. This makes
the process both transparent and
comprehensive.
For an example of blockchain's
potential power, look no further
than IBM Global Finance, which
is a $44 billion business. At any
given time, roughly $100 million
in capital is tied up in disputes.
Frequently, those disputes are
over the digital equivalent of
bookkeeping errors among
divisions of the company. They
are typically resolved, but the
process takes an average of 40
days. In the meantime, the capital
is parked rather than creating
business value.
As a demonstration, the team
built a blockchain to mirror the
global financing transactions and
applied it to dispute resolution.
"[The blockchain] went live Sept.
6, and in three months we had
reduced average dispute time
from 40 days to 10 days, and
reduced the amount of capital
tied up by 40 percent," says
Brigid McDermott, vice president
of business development for
blockchain, IBM. "Blockchain
is a fundamentally different
technology that I truly believe is
going to let people think about
businesses and industries totally
differently."

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